Thus was the Hotel Chelsea, New York's first co-operative apartment complex, introduced into the city's fierce rental food chain. An excerpt from the March 29th, 1884 Record and Guide betrays the optimism of the experiment's earliest participants: "The owners of the various apartments do not think that running expenses will cost them anything, as the stores on the ground floor & the two upper stories are retained for tenants, so as to bring in an income." In addition to the points enumerated in the Real Estate Record and Guide, the building included wrought-iron balconies, apartments of one to seven rooms (built to the purchaser's specifications), high ceilings, fire and sound-proof walls, wood-burning fireplaces, and private penthouses. A unique iron staircase, constructed with a wrought-iron balustrade and mahogany banister, ran (and still runs) from the lobby to the twelfth floor.

At the time of the Chelsea's inception, 23rd street served as a fleeting prototype of what would later become the quintessential thoroughfare of American theater, Broadway. Like the Bowery and 14th Street before it, 23rd Street's golden age as a theater strip would pass, but in the late 19th Century the Chelsea was in the center, with the Opera House Palace and Pike's Opera House (24th Street and 8th Avenue) down the block and Proctor's Theater ("continuous daily vaudeville") opening across 23rd Street. It was not until January of 1893 that this began to change, with the establishment of The Empire--Broadway's first proper theater--near 40th Street uptown. As New York historian Lloyd Morris has noted, "nobody realized that the opening of the Empire marked the beginning of a new theatrical era...yet it ushered in the Twentieth Century."

The relocation took several years, but its process ineluctably altered the social landscape of the city. Stripped of its patina of glamour, 23rd Street became a playground for real estate developers and the forces of industrialized commerce. And so the Chelsea, once and impervious stronghold of Opulence, also succumbed to the uglier forces of the market. The financial panics of 1893 and 1903, combined with the rising costs of urban life, bankrupted the Chelsea co-operative and forced the relocation of the original tenants. By 1905, the Chelsea had been sold and reorganized as a hotel.

Thus ended one grand experiment and began another, as the Chelsea Hotel began its life as a home to writers, artists, and urban transients of every variety.